Reviews the book "Financial Analysis for Management," by Ronello B. Lewis.

Reviews the book "Accounting Reports for Management," Ronello B. Lewis.

Abstract Believing that financial statements could not serve managerial, tax and regulatory purposes well unless they were adjusted for price changes, accountants have, particularly during the last quarter century, been anxious to employ replacement cost in the calculation of income. On the other hand, they have been reluctant to depart from the original monetary outlay for assets, that is, from cost incurred. The compromise has been to present replacement cost so that it appeared to adhere to cost incurred. The last-in first-out, or LIFO, method of inventory pricing is a good example. The LIFO implies a departure from cost incurred in favor of replacement cost or current cost. Nevertheless, the departure has been accomplished in such a manner that students of inventory accounting are apparently convinced that no departure from cost incurred is involved. The contrast between the conventional first-in first-out, or FIFO, calculation of cost of sales and the LIFO calculation has been discussed in this article with an example.

Abstract This article focuses on applicability of the realization principle to money claims in common dollar accounting. Common-dollar accounting refers to the branch of accounting that attempts to remove the distorting effects of changes in the general level of prices by stating all accounting magnitudes in terms of dollars having the same purchasing power. Such procedure is to be sharply distinguished from the adjustment of only depreciation and inventory charges. It is true that depreciation and inventory consumption charges may be converted into figures having more current significance than the original dollar figures. A very important difference between common-dollar adjustments and other methods of adjustment for inflation arises in the case of "money-value items" or "money claims," as they will be called throughout the remainder of this paper. It is much more difficult to determine the flow applicable to a bank balance. It is not possible to scrutinize the debits appearing on a bank's books to tell to what credits they refer.

The article reviews the book "Accounting Flows: Income, Funds, and Cash," by Robert K. Jaedicke and Robert T. Sprouse.